India's fertiliser ministry seeks to double subsidy fund

NEW DELHI, June 9 (Reuters): India's fertiliser ministry has sought to double its budgeted subsidy fund for the current fiscal year amid a global price rally, a government official said, as the South Asian nation increasingly counts the mounting cost of the Iran war.

India, where farming is a mainstay, imports fertilisers such as urea and DAP, as well as liquefied natural gas, a key feedstock for urea production.

The world's third-largest oil importer and consumer also ships in about 90% of its oil and is one of the countries most-exposed to prolonged war-related disruptions to global energy supplies.

"Department of fertiliser has already asked for doubling of fertiliser subsidy with barely three months into the financial year. We are ramping up domestic capacity to reduce imports," the official said, adding New Delhi did not expect global prices to come down.

The Indian government has also given support of 1.2 trillion rupees ($12.6 billion) to oil refiners and retailers for not hiking pump prices for the first 78 days of the war despite a rise in global prices, the official said.

Economists say sustained higher oil and fertiliser prices may drag on economic growth, inflation and government finances when the country is already bracing for an El Nino weather phenomenon that often portends drought.